<PAGE>
- 1 -
Index to Exhibits on page 14
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-1088
KELLY SERVICES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 38-1510762
--------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
999 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084
----------------------------------------------
(Address of principal executive offices)
(Zip Code)
(248) 362-4444
----------------------------------------------------
(Registrant's telephone number, including area code)
No Change
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
At October 30, 1998, 33,233,618 shares of Class A and 3,567,329 shares of Class
B common stock of the Registrant were outstanding.
<PAGE>
<PAGE>
- 2 -
KELLY SERVICES, INC. AND SUBSIDIARIES
Page
Number
------
PART I. FINANCIAL INFORMATION
Statements of Earnings 3
Balance Sheets 4
Statements of Stockholders' Equity 5
Statements of Cash Flows 6
Management's Discussion and
Analysis of Results of
Operations and Financial
Condition 7
PART II. OTHER INFORMATION 12
Signature 13
Index to Exhibits Required by
Item 601, Regulation S-K 14
<PAGE>
<PAGE>
- 3 -
<TABLE>
KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF EARNINGS
(UNAUDITED)
(In thousands of dollars except per share items)
<CAPTION>
13 Weeks Ended 39 Weeks Ended
------------------------------ -------------------------------
Sept. 27, 1998 Sept. 28, 1997 Sept. 27, 1998 Sept. 28, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Sales of services $1,032,875 $1,001,209 $2,993,543 $2,841,781
Cost of services 846,094 824,820 2,461,108 2,338,946
----------- ----------- ----------- -----------
Gross profit 186,781 176,389 532,435 502,835
Selling, general and
administrative expenses 145,404 136,464 432,057 406,319
----------- ----------- ----------- -----------
Earnings from operations 41,377 39,925 100,378 96,516
Interest income, net 841 62 2,327 552
----------- ----------- ----------- -----------
Earnings before income taxes 42,218 39,987 102,705 97,068
Income taxes 17,315 16,400 42,115 39,810
----------- ----------- ----------- -----------
Net earnings $ 24,903 $ 23,587 $ 60,590 $ 57,258
=========== =========== =========== ===========
Earnings per share:
Basic $.65 $.62 $1.58 $1.50
Diluted .65 .62 1.58 1.50
Average shares outstanding
(thousands):
Basic 38,271 38,101 38,228 38,080
Diluted 38,419 38,281 38,446 38,177
Dividends per share $.23 $.22 $.68 $.65
</TABLE>
<PAGE>
<PAGE>
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<TABLE>
KELLY SERVICES, INC. AND SUBSIDIARIES
BALANCE SHEETS AS OF SEPTEMBER 27, 1998 AND DECEMBER 28, 1997
(In thousands of dollars)
<S> <C> <C>
ASSETS 1998 1997
- ------ ------------ ------------
CURRENT ASSETS: (UNAUDITED)
Cash and equivalents $ 111,612 $ 76,690
Short-term investments 47,101 67,301
Accounts receivable, less
allowances of $13,655 and
$12,375, respectively 597,442 572,134
Prepaid expenses and other
current assets 57,588 54,847
----------- ---------
Total current assets 813,743 770,972
PROPERTY AND EQUIPMENT:
Land and buildings 43,292 44,405
Equipment, furniture and
leasehold improvements 169,836 130,472
Accumulated depreciation (79,610) (62,144)
----------- ---------
Total property and equipment 133,518 112,733
INTANGIBLES AND OTHER ASSETS 92,217 83,524
----------- ---------
TOTAL ASSETS $1,039,478 $967,229
=========== =========
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
CURRENT LIABILITIES:
Short-term borrowings $ 41,943 $ 54,958
Accounts payable 68,718 60,408
Payroll and related taxes 229,283 197,092
Accrued insurance 68,992 61,077
Income and other taxes 32,303 33,865
----------- ---------
Total current liabilities 441,239 407,400
----------- ---------
STOCKHOLDERS' EQUITY:
Capital stock, $1 par value 40,116 40,116
Treasury stock, 1,819,000 shares in
1998 and 1,953,000 shares in 1997,
respectively, at cost (6,095) (6,214)
Paid-in capital 14,658 10,980
Earnings invested in the business 556,628 522,039
Accumulated foreign currency adjustments (7,068) (7,092)
----------- ---------
Total stockholders' equity 598,239 559,829
----------- ---------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $1,039,478 $967,229
=========== =========
</TABLE>
<PAGE>
<PAGE>
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<TABLE>
KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(In thousands of dollars)
<CAPTION>
13 Weeks Ended 39 Weeks Ended
------------------------------ -------------------------------
Sept. 27, 1998 Sept. 28, 1997 Sept. 27, 1998 Sept. 28, 1997
-------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Capital Stock
Class A common stock
Balance at beginning of period $ 36,541 $ 36,537 $ 36,538 $ 36,527
Conversions from Class B - - 3 10
--------- --------- --------- ---------
Balance at end of period 36,541 36,537 36,541 36,537
Class B common stock
Balance at beginning of period 3,575 3,579 3,578 3,589
Conversions to Class A - - (3) (10)
--------- --------- --------- ---------
Balance at end of period 3,575 3,579 3,575 3,579
Treasury Stock
Balance at beginning of period (6,143) (6,104) (6,214) (6,197)
Treasury stock issued for acquisition 102 - 102 -
Purchase of treasury stock (64) - (64) -
Exercise of stock options - (124) 28 (92)
Restricted stock awards 10 6 53 67
--------- --------- --------- ---------
Balance at end of period (6,095) (6,222) (6,095) (6,222)
Paid-in Capital
Balance at beginning of period 13,751 9,080 10,980 8,265
Treasury stock issued for acquisition 828 - 828 -
Exercise of stock options 2 375 2,428 781
Restricted stock awards 77 55 422 464
--------- --------- --------- ---------
Balance at end of period 14,658 9,510 14,658 9,510
Earnings Invested in the Business
Balance at beginning of period 540,526 491,708 522,039 474,409
Net earnings 24,903 23,587 60,590 57,258
Cash dividends (8,801) (8,382) (26,001) (24,754)
--------- --------- --------- ---------
Balance at end of period 556,628 506,913 556,628 506,913
Accumulated Foreign Currency Adjustments
Balance at beginning of period (10,958) (5,964) (7,092) 306
Equity adjustment for foreign currency 3,890 (1,569) 24 (7,839)
--------- --------- --------- ---------
Balance at end of period (7,068) (7,533) (7,068) (7,533)
--------- --------- --------- ---------
Stockholders' Equity at end of period $598,239 $542,784 $598,239 $542,784
========= ========= ========= =========
Comprehensive Income
Net earnings $ 24,903 $ 23,587 $ 60,590 $ 57,258
Other comprehensive income - Foreign
currency adjustments 3,890 (1,569) 24 (7,839)
--------- --------- --------- ---------
Comprehensive Income $ 28,793 $ 22,018 $ 60,614 $ 49,419
========= ========= ========= =========
</TABLE>
<PAGE>
<PAGE>
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<TABLE>
KELLY SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE 39 WEEKS ENDED SEPTEMBER 27, 1998 AND SEPTEMBER 28, 1997
(In thousands of dollars)
<S> <C> <C>
1998 1997
------------ ------------
Cash flows from operating activities:
Net earnings $ 60,590 $ 57,258
Noncash adjustments:
Depreciation and amortization 20,906 19,449
Changes in certain working capital
components 18,817 43,863
------------ ------------
Net cash from operating activities 100,313 120,570
------------ ------------
Cash flows from investing activities:
Capital expenditures (39,309) (26,633)
Proceeds from sales and maturities of
short-term investments 1,312,378 1,361,406
Purchases of short-term investments (1,292,178) (1,385,142)
Increase in intangibles and other assets (10,133) (2,543)
------------ ------------
Net cash from investing activities (29,242) (52,912)
------------ ------------
Cash flows from financing activities:
(Decrease) increase in short-term
borrowings (13,015) 4,784
Dividend payments (26,001) (24,754)
Exercise of stock options and
restricted stock awards 2,931 1,220
Purchase of treasury stock (64) -
------------ ------------
Net cash from financing activities (36,149) (18,750)
------------ ------------
Net change in cash and equivalents 34,922 48,908
Cash and equivalents at beginning
of period 76,690 33,408
------------ ------------
Cash and equivalents at end of period $ 111,612 $ 82,316
============ ============
</TABLE>
<PAGE>
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MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations:
Third Quarter
Sales of services in the third quarter of 1998 were $1.03 billion, an
increase of 3.2% from the same period in 1997. Sales growth was
stronger in professional, technical and European operations, while U.S.
office-administrative and electronic assembly sectors grew at a more
modest rate.
Cost of services, consisting of payroll and related tax and benefit
costs of employees assigned to customers, increased 2.6% in the third
quarter as compared to the same period in 1997. Direct wage costs have
increased from 1997 at a rate somewhat higher than the general
inflation rate, due to strong worldwide demand for labor.
Gross profit of $186.8 million was 5.9% higher than the third quarter
of 1997, and gross profit as a percentage of sales increased to 18.1%
in 1998 from 17.6% in 1997. Growth in placement fees, along with the
strong performance of the professional, technical and European
businesses, improved the gross profit margin.
Selling, general and administrative expenses were $145.4 million in the
third quarter, an increase of 6.6% over the same period in 1997.
Expenses averaged 14.1% of sales as compared to 13.6% in last year's
third quarter. The rate of growth of these expenses reflects increased
spending for the year 2000 and information technology programs.
Earnings from operations of $41.4 million were 3.6% greater than the
third quarter of 1997. Interest income (net) of $0.8 million increased
significantly as compared to the third quarter of 1997 due to higher
average cash and short-term investment balances.
Earnings before income taxes were $42.2 million, an increase of 5.6%,
compared to pretax earnings of $40.0 million for the same period in
1997. The pretax margin was 4.1% as compared to 4.0% in last year's
third quarter, due to the effect of higher interest income (net) noted
above. Income taxes were 41.0% of pretax income in the third quarters
of 1998 and 1997.
Net earnings were $24.9 million in the third quarter of 1998, an
increase of 5.6% over the third quarter of 1997. Basic and diluted
earnings per share were $.65 compared to $.62 in the same period last
year.
<PAGE>
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Year-to-Date
Sales of services totaled $2.99 billion during the first nine months of
1998, an increase of 5.3% over 1997. This increase reflects modest
growth in domestic sales and strong international sales.
Cost of services of $2.46 billion was 5.2% higher than last year,
reflecting volume growth and increases in payroll rates due to strong
demand for labor worldwide.
Gross profit increased 5.9% in 1998 due to increased sales. The gross
profit rate was 17.8% for the first nine months of 1998 compared to
17.7% for 1997. Growth in placement fees from foreign operations
offset the effect of sales growth with our largest customers where
contracts require special pricing and additional implementation costs.
Selling, general and administrative expenses of $432.1 million were
6.3% higher than last year. The spending rate was 14.4% of sales, 0.1
percentage point above last year's rate. Expenses included the
information technology investment program and year 2000 related
conversion costs. Strong controls continue to be effective in managing
expenses in proper relationship to sales growth.
Earnings before taxes were $102.7 million, an increase of 5.8% over
1997. These earnings averaged a pretax margin of 3.4% in the first
nine months of both 1998 and 1997. Income taxes were 41.0% of pretax
earnings in the first nine months of 1998 and 1997.
Net earnings were $60.6 million or 5.8% higher than the first nine
months of 1997. Basic and diluted earnings per share were $1.58
compared to $1.50 last year. This was an increase of 5.3% over 1997.
Financial Condition
Assets totaled $1.04 billion at September 27, 1998, an increase of 7.5%
over the $967.2 million at December 28, 1997. Working capital was
$372.5 million, nearly the same as the end of 1997. The current ratio
was 1.8 at September 27, 1998 and 1.9 at December 28, 1997.
During the first nine months of 1998, net cash from operating
activities was $100.3 million, a decrease of 16.8% over the comparable
period in 1997. This decrease resulted principally from a decrease in
the growth of accrued liability balances offset by a containment on the
growth in the accounts receivable balance. Capital expenditures of
$39.3 million in 1998 and $26.6 million in 1997 were principally for
expanding and improving the worldwide branch network and developing new
information systems.
The quarterly dividend rate applicable to Class A and Class B shares
outstanding was $.23 per share in the third quarter of 1998. This
represents a 5% increase compared to a dividend rate of $.22 per share
in the third quarter of 1997.
<PAGE>
<PAGE>
- 9 -
During October, 1998, the Company arranged a committed $100 million
five year multi-currency revolving credit facility to be used to fund
working capital, acquisitions, and general corporate purposes. Through
the date of this filing, there have been no borrowings under the
revolving credit facility.
The Company's financial position continues to be strong. This strength
will allow it to continue to aggressively pursue growth opportunities,
while supporting current operations.
YEAR 2000 SYSTEMS UPDATE
The year 2000 problem is an issue regarding computer programs and non-
information technology systems that use embedded computer chips such as
microcontrollers. Many of these programs are unable to distinguish
between a year that begins with "20" instead of the familiar "19" and
therefore could fail or produce incorrect results.
In 1995 Kelly Services, Inc. embarked upon a global Year 2000 Project.
The project scope includes hardware, software, and embedded chip
technology. A formal Project Office was established with executive
sponsorship and funding in February, 1997. This initiated a global
business system strategy that included a wide-scale Oracle implementation
of business and financial systems, plus major enhancements to branch
automation systems. Included in these initiatives is the remediation
of year 2000 non-compliant systems.
THE COMPANY'S STATE OF READINESS
Plans for remediation of year 2000 non-compliant systems are divided
into the following major initiatives: mainframe, client server,
domestic and international subsidiaries. The common project phases
consist of: inventory all hardware, software and embedded systems;
prioritize systems based on business criticality; complete a risk
assessment based on interviews with business users and subject matter
experts, analysis of date functionality, and vendor documentation; test
and decide to upgrade, replace or retire as appropriate; internal
certification; return to production. As a part of the risk assessment
process, contingency plans will be developed in the event of system
failure. Compuware Corporation was selected to assist in the
inventory, remediation and testing process.
The inventory and assessment phase is 100% complete for all business
areas as of the third quarter of 1998. Remediation and testing is 100%
complete for some of the Kelly business units. Overall completion is
approximately 60% when all countries and business units are considered.
Kelly is on target for 100% remediation of all mission critical
customer support systems by year-end 1998. Testing will continue
throughout 1999 with planned completion during the third quarter of
1999. Testing teams are in place for mainframe, client server and
international. The testing process includes a detailed risk assessment
to determine the necessity and scope of testing. In some instances
internal certification is recommended without testing, based on the
risk assessment. This process will ensure resources remain focused on
areas of greatest risk.
<PAGE>
<PAGE>
- 10 -
External communications and readiness assessments have been distributed
to all customers, landlords, vendors, suppliers and facilities for North
America. International communications and assessments are 60% complete
with a targeted completion by year end 1998. First quarter 1999 analysis
of responses received will determine follow-up action including
additional contingency planning.
THE COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES
The total cost of the Year 2000 project is expected to be at least
somewhat offset by the additional benefits to be realized by the
Company. These include: enhanced functionality at the branch level; a
worldwide inventory of information technology and systems; a high level
documentation of business processes used by strategic business units;
rationalization and standardization of diverse information systems;
upgrades and standardization of desktop computing; upgrade of wide area
network to remote business units; improved software quality assurance;
and clean-up and documentation of older program code.
The total cost of the Year 2000 remediation project is estimated to be
approximately $21 million. The total amount incurred to date is $7
million, of which $1 million was expended in 1997 and $6 million expended
through the third quarter of 1998. Approximately $4 million of the total
cost has been incurred for remediation (code remediation, project
management compliance, and risk assessment), nearly $3 million for
testing, and the balance for contingency development.
The estimated future cost of completing the Year 2000 project is
approximately $14 million to be incurred during the fourth quarter of
1998 and throughout 1999. Of these future costs the Company estimates
approximately $8 million will relate to remediation, over $5 million for
testing and the balance for contingency activities. Funds for the project
are budgeted separately from other Information Technology initiatives.
These costs are being expensed as an element of Selling, General and
Administrative expense and are funded from cash provided by operations.
THE RISKS OF THE COMPANY'S YEAR 2000 ISSUES
The failure to correct a material Year 2000 problem could result in an
interruption, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the
Company's results of operations, liquidity and financial condition. It is
believed the most significant of risks concern the Year 2000 readiness of
third-party customers and suppliers. Due to the general uncertainty
inherent in the Year 2000 problem, resulting in part from the uncertainty
of the Year 2000 readiness of third-party suppliers and customers, the
Company is unable to determine at this time whether the consequences of
Year 2000 failures will have a material impact on the Company's results of
operations, liquidity or financial condition. The Year 2000 Project is
expected to significantly reduce the Company's level of uncertainty about
the Year 2000 problem and through, in particular, the Year 2000 readiness
of its internal systems and processes and its assessment of third party
preparedness.
<PAGE>
<PAGE>
- 11 -
In general, the Company believes all reasonable steps possible have been
taken or are in process to ensure operations will continue without
disruption. Additionally, in the event of circumstances resulting from
the failure of a third party, all reasonable steps will have been taken
to ensure appropriate contingency plans exist to minimize the impact of
these potential failures.
Forward Looking Statements
Except for the historical statements and discussions contained herein,
statements contained in this report relate to future events that are
subject to risks and uncertainties, such as: competition, changing
market and economic conditions, currency fluctuations, changes in laws
and regulations, the Company's ability to effectively implement and
manage its information technology programs and other factors discussed
in the report and in the Company's filings with the Securities and
Exchange Commission. Actual results may differ materially from any
projections contained herein.
-------------------------------------------------------------
Companies for which this report is filed are: Kelly Services, Inc. and
its subsidiaries, Kelly Assisted Living Services, Inc., Kelly
Properties, Inc., Kelly Professional and Technical Services, Inc.,
Kelly Services (Canada), Ltd., Kelly Services (UK), Ltd.,
Kelly Services (Ireland), Ltd., Kelly Services (Australia), Ltd.,
Kelly Services (New Zealand), Ltd., Kelly Services (Nederland),
B.V., Kelly Services of Denmark, Inc., Kelly de Mexico, S.A. de C.V.,
Kelly Services Norge A.S., KSI Acquisition Corp., Kelly Staff Leasing,
Inc., The Wallace Law Registry, Inc., Kelly Services (Suisse) Holding
S.A., Kelly Services France S.A., Kelly Formation S.A.R.L., Kelly
Services Luxembourg S.A.R.L., Kelly Services Italia S.R.L., Kelly
Services Iberia Holding Company, S.L., Kelly Services Empleo E.T.T.,
S.L., Kelly Services Seleccion y Formacion, S.L., Kelly Services
CIS, Inc., ooo Kelly Services CIS, Kelly Services (societa di
fornitura di lavaro temporaneo) SpA, Kelly Services Interim,
S.A., Kelly Services Deutchland GmbH, Workshop Zeitarbeit GmbH,
Workline Personal-Marketing GmbH, Kelly Services Interim (Belgium)
S.A., NV and Kelly Services Select (Belgium) S.A., NV.
The information furnished reflects all adjustments, consisting of only
normal and recurring items, which are, in the opinion of management,
necessary for a fair presentation of the results of operations for the
period in this filing.
<PAGE>
<PAGE>
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PART II. OTHER INFORMATION
Item 5. Other Information.
------------------
On September 29, 1998, the Company repurchased 1.5
million shares of its Class A common stock (KELYA) in
a negotiated transaction from the William R. Kelly
Trust. The total value of the share repurchase was $42.2
million, or $28.13 per share, representing a 3.0%
discount to the closing market price of KELYA stock on
September 23, 1998.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) See Index to Exhibits required by Item 601,
Regulation S-K, set forth on page 14 of this filing.
(b) A report on Form 8-K dated September 11, 1998 was
filed by the Company in September, 1998. The report
was filed under Item 9, sales of equity securities
pursuant to Regulation S.
<PAGE>
<PAGE>
- 13 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
KELLY SERVICES, INC.
Date: November 12, 1998
/s/ William K. Gerber
William K. Gerber
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
<PAGE>
<PAGE>
- 14 -
INDEX TO EXHIBITS
REQUIRED BY ITEM 601,
REGULATION S-K
---------------------
Exhibit
No. Description Document
- ------- ----------- --------
4 Rights of security holders are defined in
Articles Fourth, Fifth, Seventh, Eighth,
Ninth, Tenth, Eleventh, Twelfth, Thirteenth,
Fourteenth and Fifteenth of the Certificate
of Incorporation. (Reference is made to
Exhibit 3.2 to the Form 10-Q for the quarterly
period ended June 30, 1996, filed with the
Commission in August, 1996, which is incorporated
herein by reference).
11 Additional Earnings Per Share Information. 2
27.1 Financial Data Schedule for nine months ended
September 27, 1998. 3
27.2 Restated Financial Data Schedule for nine months ended
September 28, 1997. 4
<PAGE>
<PAGE>
-1-
<TABLE>
ADDITIONAL EARNINGS PER SHARE INFORMATION
Kelly Services, Inc. and Subsidiaries
Details of the common shares used to compute earnings per share are as follows
in thousands except per share items:
<CAPTION>
13 Weeks Ended 39 Weeks Ended
--------------------- ---------------------
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Weighted average shares
outstanding 38,271 38,101 38,228 38,080
Adjustment for dilutive shares
from stock options under the
treasury stock method
Shares assumed issued 1,076 1,352 1,216 841
Less - Shares assumed
repurchased (928) (1,172) (998) (744)
-------- -------- -------- --------
Additional shares assumed
outstanding 148 180 218 97
-------- -------- -------- -------
Applicable shares as adjusted 38,419 38,281 38,446 38,177
======== ======== ======== ========
Net earnings $24,903 $23,587 $60,590 $57,258
======== ======== ======== ========
Diluted earnings per common
share $.65 $.62 $1.58 $1.50
==== ==== ==== ====
This calculation is submitted in accordance with Regulation
S-K item 601(b)(11).
<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND STATEMENT OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-END> SEP-27-1998
<CASH> 111,612
<SECURITIES> 47,101
<RECEIVABLES> 611,097
<ALLOWANCES> 13,655
<INVENTORY> 0
<CURRENT-ASSETS> 813,743
<PP&E> 213,128
<DEPRECIATION> 79,610
<TOTAL-ASSETS> 1,039,478
<CURRENT-LIABILITIES> 441,239
<BONDS> 0
0
0
<COMMON> 40,116
<OTHER-SE> 558,123
<TOTAL-LIABILITY-AND-EQUITY> 1,039,478
<SALES> 0
<TOTAL-REVENUES> 2,993,543
<CGS> 0
<TOTAL-COSTS> 2,461,108
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 102,705
<INCOME-TAX> 42,115
<INCOME-CONTINUING> 60,590
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,590
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 1.58
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND STATEMENT OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> SEP-28-1997
<CASH> 82,316
<SECURITIES> 51,771
<RECEIVABLES> 609,181
<ALLOWANCES> 13,740
<INVENTORY> 0
<CURRENT-ASSETS> 772,666
<PP&E> 184,517
<DEPRECIATION> 78,399
<TOTAL-ASSETS> 958,709
<CURRENT-LIABILITIES> 415,925
<BONDS> 0
0
0
<COMMON> 40,116
<OTHER-SE> 502,668
<TOTAL-LIABILITY-AND-EQUITY> 958,709
<SALES> 0
<TOTAL-REVENUES> 2,841,781
<CGS> 0
<TOTAL-COSTS> 2,338,946
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 97,068
<INCOME-TAX> 39,810
<INCOME-CONTINUING> 57,258
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,258
<EPS-PRIMARY> 1.50
<EPS-DILUTED> 1.50
</TABLE>
